More carnage for Shire

A day after cutting its price target on pharmaceutical group Shire from £13.75 to £12.50, Goldman Sachs has now removed the company from its buy list and moved its recommendation to neutral. The move has helped Shire - a weak market all week - lose another 36p to 899p.

Goldman has been doing some analysis of Shire's new ADHD treatment Vyvanse and the conclusions do not make happy reading for the company.

"As Vyvanse is the critical component of Shire's future earnings growth, successful execution on the launch of Vyvanse is essential," says the bank.

"This not only entails converting patients from Adderall XR but also the more significant patient population currently using alternative therapies. We had previously anticipated a slow uptake of Vyvanse (launched during the seasonally slow summer period) with acceleration in demand likely to occur over the course of 2008.

"However, key takeaways from the responses to our proprietary survey of ADHD physicians suggest this view is likely to prove optimistic: 52% of high prescribers saw no difference between Adderall XR and Vyvanse -a major potential issue on expiry of Adderall XR in April 2009.

Shire's PRs have, unprompted, sent a couple of more positive notes - one from Natixis Bleichroeder suggesting the "carnage" done to Shire's shares is overdone and another from Jeffries International. So far however the carnage continues.